The Ohio Housing Finance Agency announced that effective July 1, 2016, new requests for a consumption based utility allowance will not be accepted. Those seeking the OHFA approved consumption based utility allowance will need to utilize another method as outlined in the state’s Utility Allowance Policy.
The decision was made following an audit of the Office of Program Compliance by OHFA’s Internal Audit Office (IA) regarding its current utility allowance policy. IA recommended exploring and potentially implementing a consumption-based Utility Allowance Model. Several Housing Finance Agencies are using models to calculate consumption based requests. OHFA noted that the audit did not find evidence of noncompliance (e.g. going over the HTC maximum rent with an approved consumption allowance).
The OHFA Office of Program Compliance decided to temporarily suspend the use of a consumption based utility allowance in order to explore the policy and ensure it continues to meet the spirit of the IRS and of Section 1.42-10. Exploring the use of a model or complementary approaches presents an opportunity to ensure our processes are inherently efficient and effective for the industry.
Owners who have requested a consumption based allowance prior to July 1 are exempt from this suspension. This includes any applications for funding submitted to OHFA that have requested and meet all eligibility requirements and conditions to request consumption based utility allowance. Approved consumption-based utility allowances will not be rescinded. PC recognizes this suspension could potentially impact the ability of owners to collect higher net rents. Therefore, further guidance will be issued soon.Questions regarding this matter should be directed to Betsy Krieger, [email protected].
